HB3155 EnrolledLRB103 27572 SPS 53948 b

1    AN ACT concerning employment.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Secure Choice Savings Program Act
5is amended by changing Sections 5 and 30 as follows:
 
6    (820 ILCS 80/5)
7    Sec. 5. Definitions. Unless the context requires a
8different meaning or as expressly provided in this Section,
9all terms shall have the same meaning as when used in a
10comparable context in the Internal Revenue Code. As used in
11this Act:
12    "Board" means the Illinois Secure Choice Savings Board
13established under this Act.
14    "Department" means the Department of Revenue.
15    "Director" means the Director of Revenue.
16    "Employee" means any individual who is employed by an
17employer, and who has wages that are allocable to Illinois
18during a calendar year under the provisions of Section
19304(a)(2)(B) of the Illinois Income Tax Act.
20    "Employer" means a person or entity engaged in a business,
21industry, profession, trade, or other enterprise in Illinois,
22whether for profit or not for profit, that (i) has employed at
23least 5 employees in the State during every quarter of the

 

 

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1previous calendar year, (ii) has been in business at least 2
2years, and (iii) is not offering or contributing to has not
3offered a qualified retirement plan, including, but not
4limited to, a plan qualified under Section 401(a), Section
5401(k), Section 403(a), Section 403(b), Section 408(k),
6Section 408(p), or Section 457(b) of the Internal Revenue Code
7of 1986 in the preceding 2 years. "Employer" does not include
8the federal government, the State, any county, any municipal
9corporation, or any of the State's units or instrumentalities.
10    "Enrollee" means any employee who is enrolled in the
11Program.
12    "Fund" means the Illinois Secure Choice Savings Program
13Fund.
14    "Internal Revenue Code" means Internal Revenue Code of
151986, or any successor law, in effect for the calendar year.
16    "IRA" means a Roth or Traditional IRA (individual
17retirement account) under Section 408 or 408A of the Internal
18Revenue Code.
19    "Participating employer" means an employer or small
20employer that facilitates a payroll deposit retirement savings
21arrangement as provided for by this Act for its employees.
22    "Payroll deposit retirement savings arrangement" means an
23arrangement by which a participating employer facilitates
24payroll deduction contributions from enrollees to the Program.
25    "Program" means the Illinois Secure Choice Savings
26Program.

 

 

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1    "Small employer" means a person or entity engaged in a
2business, industry, profession, trade, or other enterprise in
3Illinois, whether for profit or not for profit, that (i)
4employed less than 5 employees during any quarter of the
5previous calendar year, or (ii) has been in business less than
62 years, or both items (i) and (ii), but that notifies the
7Board that it is interested in being a participating employer.
8    "Wages" means any compensation within the meaning of
9Section 219(f)(1) of the Internal Revenue Code that is
10received by an enrollee from a participating employer during
11the calendar year.
12(Source: P.A. 101-353, eff. 8-9-19; 102-179, eff. 1-1-22.)
 
13    (820 ILCS 80/30)
14    Sec. 30. Duties of the Board. In addition to the other
15duties and responsibilities stated in this Act, the Board
16shall:
17        (a) Cause the Program to be designed, established and
18    operated in a manner that:
19            (1) accords with best practices for retirement
20        savings vehicles;
21            (2) maximizes participation, savings, and sound
22        investment practices;
23            (3) maximizes simplicity, including ease of
24        administration for participating employers and
25        enrollees;

 

 

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1            (4) provides an efficient product to enrollees by
2        pooling investment funds;
3            (5) ensures the portability of benefits; and
4            (6) provides for the deaccumulation of enrollee
5        assets in a manner that maximizes financial security
6        in retirement.
7        (b) Appoint a trustee to the IRA Fund in compliance
8    with Section 408 of the Internal Revenue Code.
9        (c) Explore and establish investment options, subject
10    to Section 45 of this Act, that offer employees returns on
11    contributions and the conversion of individual retirement
12    savings account balances to secure retirement income
13    without incurring debt or liabilities to the State.
14        (d) Establish the process by which interest,
15    investment earnings, and investment losses are allocated
16    to individual program accounts on a pro rata basis and are
17    computed at the interest rate on the balance of an
18    individual's account.
19        (e) Make and enter into contracts necessary for the
20    administration of the Program and Fund, including, but not
21    limited to, retaining and contracting with investment
22    managers, private financial institutions, other financial
23    and service providers, consultants, actuaries, counsel,
24    auditors, third-party administrators, and other
25    professionals as necessary.
26        (e-5) Conduct a review of the performance of any

 

 

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1    investment vendors every 4 years, including, but not
2    limited to, a review of returns, fees, and customer
3    service. A copy of reviews conducted under this subsection
4    (e-5) shall be posted to the Board's Internet website.
5        (f) In collaboration with the State Treasurer,
6    determine Determine the number and duties of staff members
7    needed to administer the Program and assemble such a
8    staff, including, as needed, employing staff, appointing a
9    Program administrator, and entering into contracts with
10    the State Treasurer to make employees of the State
11    Treasurer's Office available to administer the Program.
12        (g) Cause moneys in the Fund to be held and invested as
13    pooled investments described in Section 45 of this Act,
14    with a view to achieving cost savings through efficiencies
15    and economies of scale.
16        (h) Evaluate and establish the process by which an
17    enrollee is able to contribute a portion of his or her
18    wages to the Program for automatic deposit of those
19    contributions and the process by which the participating
20    employer provides a payroll deposit retirement savings
21    arrangement to forward those contributions and related
22    information to the Program, including, but not limited to,
23    contracting with financial service companies and
24    third-party administrators with the capability to receive
25    and process employee information and contributions for
26    payroll deposit retirement savings arrangements or similar

 

 

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1    arrangements.
2        (i) Design and establish the process for enrollment
3    under Section 60 of this Act, including the process by
4    which an employee can opt not to participate in the
5    Program, select a contribution level, select an investment
6    option, and terminate participation in the Program.
7        (j) Evaluate and establish the process by which an
8    individual may voluntarily enroll in and make
9    contributions to the Program.
10        (k) Accept any grants, appropriations, or other moneys
11    from the State, any unit of federal, State, or local
12    government, or any other person, firm, partnership, or
13    corporation solely for deposit into the Fund, whether for
14    investment or administrative purposes.
15        (l) Evaluate the need for, and procure as needed,
16    insurance against any and all loss in connection with the
17    property, assets, or activities of the Program, and
18    indemnify as needed each member of the Board from personal
19    loss or liability resulting from a member's action or
20    inaction as a member of the Board.
21        (m) Make provisions for the payment of administrative
22    costs and expenses for the creation, management, and
23    operation of the Program, including the costs associated
24    with subsection (b) of Section 20 of this Act, subsections
25    (e), (f), (h), and (l) of this Section, subsection (b) of
26    Section 45 of this Act, subsection (a) of Section 80 of

 

 

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1    this Act, and subsection (n) of Section 85 of this Act.
2    Subject to appropriation, the State may pay administrative
3    costs associated with the creation and management of the
4    Program until sufficient assets are available in the Fund
5    for that purpose. Thereafter, all administrative costs of
6    the Fund, including repayment of any start-up funds
7    provided by the State, shall be paid only out of moneys on
8    deposit therein. However, private funds or federal funding
9    received under subsection (k) of Section 30 of this Act in
10    order to implement the Program until the Fund is
11    self-sustaining shall not be repaid unless those funds
12    were offered contingent upon the promise of such
13    repayment. The Board shall keep investment fees total
14    annual expenses as low as possible, but in no event shall
15    they exceed 0.25% 0.75% of the total trust balance. The
16    Board may charge administrative fees, established by rule,
17    that shall be consistent with industry standards.
18        (n) Allocate administrative fees to individual
19    retirement accounts in the Program on a pro rata basis.
20        (o) Set minimum and maximum contribution levels in
21    accordance with limits established for IRAs by the
22    Internal Revenue Code.
23        (o-5) Select a default contribution rate for Program
24    participants within the range of 3% to 6% of an enrollee's
25    wages.
26        (o-10) Establish annual, automatic increases to the

 

 

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1    contribution rates based upon a schedule provided for in
2    rules up to a maximum of 10% of an enrollee's wages.
3        (p) Facilitate education and outreach to employers and
4    employees.
5        (q) Facilitate compliance by the Program with all
6    applicable requirements for the Program under the Internal
7    Revenue Code, including tax qualification requirements or
8    any other applicable law and accounting requirements.
9        (q-5) Verify employee eligibility for auto-enrollment
10    in accordance with the Internal Revenue Code and
11    applicable Federal and State laws. The verification shall
12    include the rejection of any enrollee under 18 years of
13    age.
14        (r) Carry out the duties and obligations of the
15    Program in an effective, efficient, and low-cost manner.
16        (s) Exercise any and all other powers reasonably
17    necessary for the effectuation of the purposes,
18    objectives, and provisions of this Act pertaining to the
19    Program.
20        (t) Deposit into the Illinois Secure Choice
21    Administrative Fund all grants, gifts, donations, fees,
22    and earnings from investments from the Illinois Secure
23    Choice Savings Program Fund that are used to recover
24    administrative costs. All expenses of the Board shall be
25    paid from the Illinois Secure Choice Administrative Fund.
26    The Board may enter into agreements with other

 

 

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1governmental entities, including other states or their
2agencies and instrumentalities, to enable residents of other
3states to participate in the Program.
4(Source: P.A. 101-353, eff. 8-9-19; 102-179, eff. 1-1-22.)
 
5    Section 99. Effective date. This Act takes effect upon
6becoming law.